Equity indices firmed up once again amid fresh buying support in afternoon trade. The Nifty bounced from the crucial 11,300 mark. Positive global cues boosted sentiment.
At 13:28 IST, the barometer index, the S&P BSE Sensex, was up 290.91 points or 0.76% at 38,472.72. The Nifty 50 index added 76.9 points or 0.68% at 11,347.35.
The broader indices lagged the benchmarks. The S&P BSE Mid-Cap index was up 0.04% while the S&P BSE Small-Cap index rose 0.24%.
The market breadth was strong. On the BSE, 1538 shares rose and 1063 shares fell. A total of 127 shares were unchanged.
Foreign portfolio investors (FPIs) bought shares worth Rs 302.88 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 504.92 crore in the Indian equity market on 10 August, provisional data showed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 20,090,541 with 736,208 deaths. India reported 6,39,929 active cases of COVID-19 infection and 45,257 deaths while 15,83,489 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
AGR Hearing:
The Supreme Court (SC) yesterday adjourned the hearing on telecom companies which are under insolvency proceedings to 14 August 2020, while stating that the Government should come prepared with a plan for recovery of dues from debt ridden telecom companies. However, there is still no clarity given by SC on the question of staggered repayment of AGR dues to be given to telcos. Both Vodafone Idea (down 3.85%) and Bharti Airtel (down 0.96%) requested for a 15-year window to clear the dues, while Tata Teleservices (up 3.92%) has sought 7-10 years.
Earnings Today:
Adani Ports and Special Economic Zone was up 1.06% ahead of Q1 earnings today.
Among the other stocks, Bosch (down 0.86%), KRBL (up 3.02%), Metropolis Healthcare (down 1.87%), Prataap Snacks (up 3.11%), RITES (up 1.59%), Rashtriya Chemicals & Fertilizers (up 0.48%) and Symphony (up 0.24%) will announce their quarterly earnings today.
Earnings Impact:
Titan Company fell 3.86% after the company reported a consolidated net loss of Rs 297 crore in Q1 June 2020 compared with net profit of Rs 364 crore in Q1 June 2019. Revenue from operations stood at Rs 1979 crore in Q1 June 2020, tumbling 61.5% from Rs 5151 crore in the same period last year. The disruption caused by the COVID-19 pandemic affected company's performance severely with retail outlets closed for a major part of the quarter. The lockdowns impacted the company's operations significantly in the months of April and May 2020 as most stores were forced to shut down. While stores started opening in May, post Unlock 1.0, even as at end of June 2020, only 83% of all the stores opened and even for stores that opened, many of them were not operating for all days. With the negative consumer sentiment prevailing in the quarter, discretionary spends were very low, and specifically impacted company's Watches business and diamond studded jewellery in the Jewellery business. Plain gold jewellery sales, however, recovered better than expected in June despite high gold prices.
Shree Cement declined 4.10% after consolidated net profit fell 13.6% to Rs 330.35 crore on 24.9% drop in net sales to Rs 2,480.14 crore in Q1 June 2020 over Q1 June 2019. During the quarter ended 30 June 2020, Shree Cement's Indian operations were partially affected due to lockdown announced on account of COVID-19 pandemic by State and Central Government. The cement manufacturing major has considered the possible impact of COVID-19 in preparation of the financial results. The company believes that pandemic is unlikely to impact on the recoverability of the carrying value of its assets as at 30 June 2020. As the situation of pandemic is still continuing, the extent to which the same will impact company's future financial results is currently uncertain and will depend on further developments.
Power Grid Corporation of India shed 0.17%. The company's consolidated net profit fell 18.15% to Rs 2,048.42 crore on 9.24% rise in total income to Rs 10,258.67 crore in Q1 June 2020 over Q1 June 2019. The state-owned entity has given a consolidated one-time rebate of Rs 1,075 crore to DISCOMs and Power Departments of States / Union Territories for passing on to end consumers on account of COVID-19 pandemic against the billing of April 2020 and May 2020. Due to this consolidated one-time rebate, there is a reduction in the profit for the current quarter.
Bank of Baroda (BoB) declined 3.3% after the bank posted net loss of Rs 864.26 crore in Q1 June 2020 as against net profit of Rs 709.87 crore in Q1 June 2019. Total income declined 2.6% YoY to Rs 20,312.44 crore during the quarter. The bank's global net interest margin (NIM) during Q1 June 2020 stood at 2.55% while domestic NIM in Q1 June 2020 stood at 2.63% compared with 2.62% and 2.73% respectively during the same period last year. The bank's provisions and contingencies surged 71.3% to Rs 5627.70 crore in Q1 June 2020 from Rs 3284.88 crore in Q1 June 2019. The bank said it made provisions on standard accounts of Rs 1,811 crore. With respect to COVID-19 provisioning, the bank made fresh provision of Rs 996.11 crore in Q1 June 2020. The bank's provision coverage ratio in Q1 June 2020 stood at 83.30% higher than 77.34% reported in the same quarter last year. On the asset quality front, the ratio of gross NPAs to gross advances stood at 9.39% as on 30 June 2020 as against 9.4% as on 31 March 2020 and 10.28% as on 30 June 2019. The ratio of net NPAs to net advances stood at 2.83% in Q1 FY21 as against 3.13% in Q4 FY20 and 3.95% in Q1 FY20.
KEC International jumped 6.19%. The company reported a 20% decline in consolidated net profit to Rs 71 crore on a 9% fall in revenues to Rs 2,207 crore in Q1 June 2020 over Q1 June 2019. EBITDA margin was at 8.8% as on 30 June 2020 as against 10.4% as on 30 June 2019.
HEG rose 2.32%. The company's consolidated net profit slumped 95.4% to Rs 10.76 crore on 71.4% decline in net sales to Rs 233.29 crore in Q1 June 2020 over Q1 June 2019. "Since the lockdown was in force for a significant period of the quarter, the company's operations and financial results for the quarter ended 30 June 2020 have been adversely impacted," the company said in a statement.
Global Markets:
European markets opened higher while Asian indices were trading on a positive note on Tuesday following the overnight gains on Wall Street.
The Singapore economy contracted by 42.9% in the second quarter of 2020 compared to the previous quarter on an annualized, seasonally-adjusted basis, said the Ministry of Trade and Industry. The updated figure was worse than the official advance estimate released last month, and confirmed the Southeast Asian country had entered a technical recession.
The trade and industry ministry revised its full-year forecast for Singapore to register an economic contraction of between 5% and 7% in 2020. Previously, it had expected the country's GDP to fall by between 4% and 7%.
The US stocks closed mixed on Monday, 10 August 2020, with the Dow Industrials rallied along with the S&P 500 index but the Nasdaq bucked the trend, as investors rotated into value stocks from tech sector while they awaited news on progress in a fiscal support bill for the country's battered economy.
Monday trading showed signs of a rotation away from high-growth stocks in the tech sector to more economically sensitive cyclical companies. As the summer COVID-19 spike wanes, investors are more inclined toward cyclical stocks to view the economic recovery as real and sustainable for the first time since the pandemic began.
Providing some support, US President Donald Trump signed executive orders that partly restored enhanced unemployment benefits after talks between the White House and top Democrats in Congress about fresh stimulus broke down last week.
Tensions between Washington and Beijing were also at play, after Trump signed executive orders last week banning major Chinese technology firms in 45 days' time while announcing sanctions on 11 Chinese and Hong Kong officials.
Eastman Kodak Co sank after its $765-million loan agreement with the US government to produce pharmaceutical ingredients was put on hold due to "recent allegations of wrongdoing."
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